The Disadvantages of Using Accounting Software

The disadvantages of accounting software can outweigh the benefits for small business.

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Almost every article or report you read today talks about the advantages and sometimes the necessity of business owners to incorporate technology into every aspect of their business. But an accounting software package is not necessarily the best idea for every small business. If you are self-employed or own a small business, you should consider the downside to utilizing accounting software as well as advantages gained.

Cost

Although some small business accounting packages are reasonably priced, the cost of the software is not the only cost of using the software. Accounting software requires minimum standards for computer use in regards to RAM, processor speed and hard drive memory. Making a backup of your accounting data may also require more storage space than an Excel spreadsheet, which is easily copied to a flash drive. Technical support for the software may cost extra, and you can incur annual licensing fees in order to receive upgrades. If you are not skilled in software installation or accounting setup, you may also incur the cost of hiring a consultant to perform those tasks for you.

Difficulty

Some accounting software packages are designed specifically for non-accountants, but you will still experience a learning curve when converting to any software package. If you have never used accounting software before, learning the accounting terms, layouts and determining a proper setup may be more difficult than the benefits received from utilizing the software. Running your own business already comes with enough stress and aggravation. You should not add the stress of learning accounting software to the mix unless it is absolutely necessary or the gains from utilizing the software outweigh the losses.

Time

Processing expenses and invoices in accounting software will usually take more time than simply logging the expense on a ledger pad or spreadsheet software and creating handwritten invoices or spreadsheet-based invoices. If using the computer is not a large part of your daily routine, the time required to process basic daily financial data may outweigh any benefit gained from the software.

Maintenance

Maintaining accounting software not only includes performing upgrades to the accounting software package, but also maintaining and upgrading all the necessary equipment to utilize the accounting software as new versions can require upgraded equipment. That equipment often includes your PC or laptop, monitor, printer, Internet connection and modem, backup drive and operating system. If you do not wish to spend the time and money to keep your equipment in compliance with the accounting software, it is best to stick to spreadsheet or ledger accounting.

About the Author

Kaye Morris has over four years of technical writing experience as a curriculum design specialist and is a published fiction author. She has over 20 years of real estate development experience and received her Bachelor of Science in accounting from McNeese State University along with minors in programming and English.

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